US Bakery Industry

The US bakeshop patience has combined annual revenue of roughly $25 billion from mercenary-grade bakeries and nearly $2 billion from small sell bakeries. There be about 2600 commercial bakeries in the US and 7000 small retail bakeries. Some of the leading companies within this effort let in Interstate Bakeries and Flower Foods as well as smaller divisions such(prenominal) as Sara Lee and Nabisco. The commercial bakeshop segment is passing concentrated with 80% of the grocery held by 50 heroic bakeries. On the other hand, the retail bakehouse segment is highly fragmented.Larger bakeries dominate the mart because they brook ampleer economies of scale in procurement, resultion and distri exception. The industry is also characterized by high automation. However, the end bakehouse product is generally low value and but the stable posit is sufficient to arrive modest revenues for well-nigh players in the market. The about commonly sold bakery items include bake bread s (white, wheat and rye), rolls, muffins, buns, bagels and croissants. Other commonplace items include cakes, pies, pastries and doughnuts. ( application Overview US bakehouse constancy Hoovers Online)Competition is tough but differentiation clear be attained through automation. Although bake is a low-technology business, the larger the bakery facilities and the much automated the facility the bigger the kale for that company. This is because in large automated facilities, lug costs bottom of the inning be trim signifi lowlifetly and maximum production can be attained. However, since bakery products ar highly perishable, large facilities are only sure for bakeries which watch high sales and do not maintain a great deal of inventories.Bakeries also face contestation from coffee outlets and fast aliment outlets since most of them also carry bakery panache products such as bagels, pastries, doughnuts etc. mercenary bakeries once again enjoy a tyrannical position beca use they can act as suppliers to these outlets while smaller retail bakeries some metres have to suffer since customers have to a greater extent inclination to go to fast food outlets then to visit a bakery. Moreover, customer trends are rapidly changing.There was a time when the average consumer desired freshly bake products but at a time consumers are free to purchase packaged products and believe that they are safe, easy and convenient to use. Thus, packaged bakery snack products are also snatching the portion from retail bakeries which offer freshly baked products to the consumers. (US bakeshop Trends) Consumer supplicates and preferences are also changing constantly. Today, customers have become more health conscious and demand low flesh out and fat free products. Moreover, customers are now increasingly aware and rather educated.They have detailed information about fodder and quality issues and have sophisticated tastes and preferences. That is why the industry has seen a growth in non-traditional bread products such as bagels, categoric breads and organic products. Bakeries have had to change their strategies and their expert capabilities in order to keep up with the changing customer demands and preferences. (Bakeries and Snacks 2005) Bakeries are touch by external factors such as volatile prices of raw materials. Most baked goods use parts such as flour, staff of life and vegetable oil.These are planetary commodities with move prices so it is important for both commercial and retail bakeries to make intelligent and proactive purchase decisions. Flour is the primary ingredient in baked goods and accounts for the largest cost segment for bakery products. Wheat prices are quite volatile and this can have a significant impact on do good margins. Price of cover has a resembling impact and many bakeries have switched from butter to vegetable oil but again quality has to be maintained in order to sustain a competitive position within the industry.The US bakery industry also has a maturation export segment. Since the 1990s exports of US bakery products have been increasing consistently. It is expected that exports of US bakery products will exceed $250 one thousand million by the middle of the decade if not higher. Some of the core reasons for the growth in exports include rising incomes, increasing populations, ontogenesis tourist industries, reduction in muckle barriers and an overall increase in global demand for baked goods.The main factors keep export growth are demand for freshness and transportation limitations. However, with the improvement of technology, bakeries are now able to produce products that drown these limitations. Moreover, there is always a demand for baked mixes, cookies and doughs that can be easily packaged and transported and that have longer shelf lives. The biggest customer of US baked goods is Canada. It is a huge market and Canadian customers have similar tastes to US customers. It is estimated that nearly half of US bakery products are consumed by Canada. (Clair, Thomas 1992)Bibliography1. Industry Overview US Bakery Industry. Hoovers Online. Retrieved May fifth 2008 http//www. hoovers. com/bakeries/ID__91/free-ind-fr-profile-basic. xhtml.2. Clair, Thomas. (1992) Bakery products exports on the rise. AgExporter. Retrieved May fifth 2008 http//findarticles. com/p/articles/mi_m3723/is_n1_v4/ai_11754641/pg_2.3. The Canadian Bread and Bakery Industry. Agriculture and Agri Food Canada. Retrieved May fifth 2008 http//www4.agr.gc.ca/AAFC-AAC/display-afficher.do? id=1171653091262&lang=e.4. Bakery industry cashes in on wholegrain trend. 2005. Retrieved May fifth 2008 http//www. bakeryandsnacks. com/news/printNewsBis. asp? id=62237.5. Eyre, Charlotte. US Bakery markets beckons for Vivartia. Retrieved May 5th 2008 http//www. cee-foodindustry. com/news/ng. asp? id=83797-vivartia-nonni-s-wind-point-partners.6. US Bakery Trends. Retrieved May 5th 2008 http//www. bakeinf o. co. nz/industry/trends/article. php? id=43.